The three basic types of reverse mortgage are: single-purpose reverse mortgages, which are offered by some state and local government agencies and nonprofit organizations; federally-insured reverse mortgages, which are known as Home Equity Conversion Mortgages (HECMs), and are backed by the U. S. Department of Housing and Urban Development (HUD) or Federal housing Administration (FHA); and proprietary reverse mortgages, which are private loans that are backed by the companies that develop them.Single-purpose reverse mortgages generally have very low costs. But they are not available everywhere, and they only can be used for one purpose specified by the government or nonprofit lender. An excellent example is the city of Madison, WI which allows seniors over 65 with less than 30,000 in income to pay their property taxes with a modified reverse mortgage. In most cases, you can qualify for these loans only if your income is low or moderate.HECM’s and proprietary reverse mortgages tend to be more costly than other home loans. The up-front costs can be 2% FHA and 2% origination fee plus all the normal fees associated with a mortgage (closing costs). Like a refinance if you plan on being in your house a short amount of time, it […]

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